Google Expands AI Search Ads Globally as Search Ad Growth Slows

Google is expanding ads in its AI-powered Search experiences to international markets, seeking new revenue as growth in its core search advertising business slows. The company announced the move during parent company Alphabet’s third-quarter earnings call.

Alphabet reported revenue of $127.6 billion, up 25% year over year. Google Search revenue grew 12% in the third quarter, compared with 17% in the second quarter and 19% in the first. Alphabet shares fell 8% after the results.

Google chief business officer Philipp Schindler said the company is bringing ads in AI Overviews and AI Mode to more users and queries, and is expanding AI Mode ads internationally for the first time. The announcement also included multi-turn ads and AI Mode in the U.S.

Schindler said click-through rates for sponsored product listings in AI Mode were comparable to organic listings, and that Google’s user research found people considered the ads relevant. CEO Sundar Pichai said queries in AI Mode were three times longer on average than traditional searches. One in five AI Mode searches globally involved voice, images, or documents, and Google had surpassed 50 billion visual searches per month.

Google Services, which includes Search, generated $96.3 billion in revenue, up 11% year over year. Google Cloud revenue rose 103% to $30.7 billion.